Which of the following would be considered a contingent liability?

Question

Quizplus · Accepted Answer

A contingent liability is a potential liability that depends on the occurrence of a future event. Pending legal action falls under the category of contingent liability as the outcome of the legal action is uncertain and can lead to a financial obligation for the company. Sales tax, mortgage, and accounts payable obligations are all current liabilities that are definite and not contingent on any future event.

Which of the Following Would Be Considered a Contingent Liability